The ethical battles of HR

by 16 Sep 2008

A new lucrative project in your company has commenced and the CEO approaches you, the HR director, with the task of helping to lower labour costs.

You assess the options and discover that legally, you can employ foreign workers for below minimum wage – almost $10 below minimum wage. At the same time, Australian workers on the same project would have to be paid about $30 above minimum wage.

What would you do? Strive to meet the CEO’s expectations, lower costs and bolster the bottom line at the expense of foreign workers? Or propose instead that you adhere to the company’s code of ethics that is more than likely displayed on the company website.

These are some of the ethical questions HR departments have to face.

I think, at the end of the day, the HR department would get more thanks for saving the company’s reputation rather than a saving a few bob on a project. Taking the approach – if it’s legal, do it – is not always the best. In the case of McDermott Industries (see story on right) their employment strategies were legal, but it was a far cry from ethical.

HR departments should take a more long-term, ethical approach. They should design systems and processes that hold leaders accountable for the ethical dimension of their leadership.